Building a business in the virtual world 9781422229125, 1422229122, 9781422229132, 1422229130, 9781422229804, 1422229807

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NHMC13_10HBK_SmllBizFinance_NHMC13_SmallBizFinance 5/5/13 9:59 AM Page 5

Are you interested in having your own business? Today, young people have never had more opportunities to build new and exciting businesses. Before you start your business, you’ll need to know the basics, though. In the twenty-first century, almost every kind of business is being done online. Understanding how to build a business using the Internet is vitally important. In Building a Business in the Virtual World, you’ll discover how companies are using the Internet to find success no matter what their business—and how you can too.

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Cover images: Shutterstock.com

ISBN 978-1-4222-2913-2

EAN

90000

9 781422 229132

Building a Business in the Virtual World

Young Adult Library of Small Business and Finance Building a Business in the Virtual World Business & Ethics Business & the Government: Law and Taxes Business Funding & Finances Keeping Your Business Organized: Time Management & Workflow Managing Employees Marketing Your Business Starting a Business: Creating a Plan Understanding Business Math & Budgets What Does It Mean to Be an Entrepreneur?

Yo u n g Adult Library of S ma l l B u s i n ess and Financ e

Building a Business in the Virtual World C.F. Earl

Mason Crest

Mason Crest 450 Parkway Drive, Suite D Broomall, PA 19008 www.masoncrest.com Copyright © 2014 by Mason Crest, an imprint of National Highlights, Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, taping or any information storage and retrieval system, without permission from the publisher. Printed in the United States of America. First printing 987654321 Series ISBN: 978-1-4222-2912-5 Hardcover ISBN: 978-1-4222-2913-2 Paperback ISBN: 978-1-4222-2980-4 ebook ISBN: 978-1-4222-8903-7 The Library of Congress has cataloged the hardcopy format(s) as follows: Library of Congress Cataloging-in-Publication Data Earl, C. F. Building a business in the virtual world / C.F. Earl. pages cm. – (Young adult library of small business and finance) Audience: Age 12 Audience: Grade 7 to 8 ISBN 978-1-4222-2913-2 (hardcover) – ISBN 978-1-4222-2912-5 (series) – ISBN 978-1-4222-8903-7 (ebook) – ISBN 978-1-4222-2980-4 (paperback) 1. Small business–Management–Juvenile literature. 2. New business enterprises–Management–Juvenile literature. 3. Electronic commerce–Juvenile literature. 4. Social media–Economic aspects–Juvenile literature. I. Title. HD62.7.E23 2014 658.8’72–dc23 2013011591 Produced by Vestal Creative Services. www.vestalcreative.com

Contents Introduction 6 1. Expanding Your Business on the Internet 11 2. Creating a Website 21 3. Social Media 33 4. The Power of E-Mail 45 5. Be Open to New Opportunities 53 Find Out More 58 Vocabulary 59 Index 61 About the Author and Consultant 63 Picture Credits 64

Introduction

Brigitte Madrian, PhD

S

mall businesses serve a dual role in our economy. They are the bedrock of community life in the United States, providing goods and services that we rely on day in and day out. Restaurants, dry cleaners, car repair shops, plumbers, painters, landscapers, hair salons, dance studios, and veterinary clinics are only a few of the many different types

of local small business that are part of our daily lives. Small businesses are also important contributors to the engines of economic growth and innovation. Many of the successful companies that we admire today started as small businesses run out of bedrooms and garages, including Microsoft, Apple, Dell, and Facebook, to name only a few. Moreover, the founders of these companies were all very young when they started their firms. Great business ideas can come from people of any age. If you have a great idea, perhaps you would like to start your own small business. If so, you may be wondering: What does it take to start a business? And how can I make my business succeed? A successful small business rests first and foremost on a great idea—a product or service that other people or businesses want and are willing to pay for. But a good idea is not enough. Successful businesses start with a plan. A business plan defines what the business will do, who its customers will be, where the firm will be located, how the firm will market the company’s product, who the firm will hire, how the business will be financed, and what, if any, are the firm’s plans for future growth. If a firm needs a loan from a bank in order to start up, the bank will mostly likely want to see a written business plan. Writing a business plan helps an entrepreneur think

Introduction

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through all the possible road blocks that could keep a business from succeeding and can help convince a bank to make a loan to the firm. Once a firm has the funding in place to open shop, the next challenge is to connect with the firm’s potential customers. How will potential customers know that the company exists? And how will the firm convince these customers to purchase the company’s product? In addition to finding customers, most successful businesses, even small ones, must also find employees. What types of employees should a firm hire? And how much should they be paid? How do you motivate employees to do their jobs well? And what do you do if employees don’t get along? Managing employees is an important skill in running almost any successful small business. Finally, firms must also understand the rules and regulations that govern how they operate their business. Some rules, like paying taxes, apply to all businesses. Other rules apply to only certain types of firms. Does the firm need a license to operate? Are there restrictions on where the firm can locate or when it can be open? What other regulations must the firm comply with? Starting up a small business is a lot of work. But despite the hard work, most small business owners find their jobs

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rewarding. While many small business owners are happy to have their business stay small, some go on to grow their firms into more than they ever imagined, big companies that service customers throughout the world. What will your small business do?

Brigitte Madrian, PhD Aetna Professor of Public Policy and Corporate Management Harvard Kennedy School

Introduction

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ONE

Expanding Your Business on the Internet

W

e live in a global world. You may have heard this phrase before, but what does it mean exactly? It means we are all connected to each other, and can communicate with just about anyone in the world in a short amount of time. The idea of a global world is important for business. Even as a young person, you should pay attention to the connections we all have across the globe. You can do better business and make more money when you understand how we’re all connected.

This telegraph key is one of the first communication technologies that allowed for fast, long-distance communication. But because of it’s simple design, it was only able to send Morse code!

Speeding Things Up Not too long ago, people couldn’t communicate with the other side of the world very well. Everything happened locally—in the same neighborhood or town. Businesses were often pretty small and only sold things to people who lived nearby.

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One of the reasons everything was local was because of transportation. A long time ago, people only had animals and wheels to carry things from place to place. If you were growing carrots on your farm, you had to sell them to people who lived close by. You sold them to neighbors and ate them yourself. You might have taken them to a market on a cart pulled by a horse. But you could only take your carrots so far because there wasn’t any way to get them more than a few miles away without them getting old and spoiled. Then transportation got faster and faster. Railroads were built so people could send their carrots and other goods by train. Trains could go all the way across a country so people could sell their products farther away. They could also send things by ship across the ocean or down rivers. Later on, even faster transportation was invented. Cars and trucks could take those carrots you grew all the way across the country, even where railroads didn’t go. Planes could even take them all the way to the other side of the world. You could sell carrots to people millions of miles away. Today, goods are transported very quickly just about anywhere in the world. You can buy pineapples from Costa Rica, electronics from Japan, and clothes made in China. Another reason business only used to happen locally was because of communication technology. In the past, people could only communicate over long distances by letter or in newspapers. If you were making shoes, all your workers had to be in your own shoe shop. You wouldn’t be able to tell employees in another state or country what to do very easily. The telegraph was the first kind of fast, long-distance communication. Suddenly people could send messages to friends and family hundreds of miles away in just a few seconds. Business

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Smart phones are a huge step in computer and communication technology, making buying and selling on the Internet open to more people around the world. got easier too, because people in different companies or different parts of companies could communicate quickly. Telephones came next. Now people could actually talk to others who were far away, not just send them short messages. Businesses were even easier to run now, and business deals no longer had to be carried out locally. You could have shoe factories in lots of different places, and because you could communicate between all of them, you could make lots of shoes and sell them in more places than in the past.

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Computers Telephones and planes were great for business, but something even better came along next—computers. Computers, especially personal computers, have really changed things a lot in the past two decades. Business is a lot faster, and people can sell all sorts of things they couldn’t before because of computers. Computers have made keeping businesses organized a lot easier. Before, people had to write down things, like how much money they made, their employee’s time and their wages, business expenses, and more. They kept everything in books, and had to take a lot of time to write down and look up information they needed in them. Today, people use computers to keep track of all that. The invention of the Internet is another reason computers have revolutionized business. You can use the Internet to help you start a business and keep it going strong. And you can do business on the Internet with people all around the world.

Doing Research The Internet can help you start a business in the first place. Books are great research tools, along with talking to people who already have business experience. But you can also do plenty of research just by sitting down at the computer. Internet searches will help you figure out what sort of business you want to start and how to do it. You’ll find that starting a business has a lot of steps if you want it to grow and become successful. Internet searches like “how to start a business as a young person,” or “How do I start a business?” will get you

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Starting a Business Step by Step

Starting a business can be a lot of work, but it’s exciting and rewarding work! Here are a few steps to take if you want to start a business. 1. Decide on your business. Ask yourself what you’re good at and what you enjoy doing. Can you make your interests into a business that makes you money? 2. Research your competition. Figure out if other businesses are already selling what you want to sell, and if there’s room for another similar business. Take a look at what similar businesses are charging their customers to figure out your own prices. 3. Name your business. Pick a name that is creative but still tells people what your business does. 4. Create a business plan. Business plans are basically roadmaps for success—they describe what your business will be, and how you will run it. 5. Make a list of your expenses. What are the things you need to buy to start your business? Will you need materials, space, employees, or training? 6. Find money. You’ll need money to cover all your expenses for getting started. You can spend your own money, or find people who are willing to give you a loan. 7. Advertise. Print out flyers, advertise in the newspaper, and use the Internet to spread the word about your business. Make sure your ads have enough information, including what you sell, how

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much it is, and how to contact you. Get business cards and hand them out to people you meet. 8. Keep track of the money. Write down everything you spend and the money you make. That way, you’ll be able to see if you’re making more money than you’re spending. 9. Pay taxes. If you make enough money, you legally have to pay taxes. Check with the IRS (Internal Revenue Service) to figure out if you made enough to pay taxes.

started. When you have more specific research to do, you can narrow your search down by typing things like “social media for babysitters,” or “raising money for a gardening business.” Doing good Internet research takes practice. There are thousands of websites out there with information you need. A good Internet researcher knows how to get to that information quickly. Try out different search terms, or go to your local or school library and ask for help. Librarians are trained in how to help people do online research. They can give you lots of tips and point you toward some good Internet resources.

Finding Customers The Internet is also great for finding customers. Your customers could be anywhere in the world. All they have to do is find your website, or talk to you via e-mail, and they’ll buy what you’re selling.

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Entrepreneur Adam Horwitz has made all of his money with Internet businesses. His most recent business creates courses that teach others how to make money using the Internet. The Internet lets you advertise to millions of people if you want. You can e-mail, send tweets, or other messages to people right next door—or in another country. People who wouldn’t have heard of your business will find it on the Internet. If they like what they see, they’ll become customers!

Selling Businesses used to have to sell to customers in person. Now you can sell anything you make to customers all around the world, no matter where they are. You could sew bags, paint vases, or make

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jewelry—and then sell them on an online craft marketplace like Etsy. You could sell baseball cards on eBay or as a vendor on Amazon.com. Or you could just set up your own website and sell your product online. You can sell services as well as goods. Goods are physical things people sell, like clothes, food, and furniture. Services are actions people sell, like dog walking, house cleaning, and music lessons.

Young Internet Businessman Young people who start businesses know the importance of the Internet. One young man whose businesses rely entirely on the Internet is Adam Horwitz. As a teenager, Adam figured out that he wanted to make money online. He succeeded by figuring out how to make money with ads online, but he didn’t stop there. He wanted to teach other young people how to make money online too. So he set up a business of online courses, teaching other teens how to do what he did. His first successful business course was called Mobile Monopoly, and it made hundreds of thousands of dollars. At age fifteen, Adam decided he wanted to become a millionaire by twenty-one. He worked really hard at his businesses to achieve his goal. And he made it! Mobile Monopoly and other courses made more than a million dollars before he even turned eighteen. Adam relied almost entirely on the Internet to make his money and run his business. Do you have a good idea like Adam did? The Internet just might be able to help you turn it into a successful business.

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TWO

Creating a Website

O

ne of the very first things you want to do when you start a real business is create a website. Not so long ago, it didn’t matter much if your business didn’t have a website because not many businesses did. Today, however, pretty much every business has a website, and almost everyone has access to computers and the Internet. Without a website, you’re missing out on telling a lot of people about your business.

What a Website Can Do For You Websites are useful for several reasons: people can find out about what your business does, they can figure out how to contact you, and they can buy things from you.

Having a website that is easy to navigate means that a potential client will be able to quickly and easily access all of the information he might need. A well-designed menu is the most important step for making your website easy to navigate. A good website tells visitors exactly what your business does. It has information about your business’s history and what you do. It includes costs and contact information. Spend time making your website look good. The better it looks, the more professional you and your business will seem. For example, if you had a business tutoring kids in computer coding, your website would have information about who you are, why you’re qualified to tutor, and how your business works. You might have quotes from customers who were happy with your tutoring. You also should list how much you charge for tutoring and what subjects you can and can’t tutor. Finally, you should put

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your contact information on the website, so potential customers can get in touch with you. Websites can also help you sell things. Many websites offer products for sale. If you’re a tutor, for example, customers could order an hour of tutoring with you on your website. Ordering online works best, though, when you’re selling physical goods, like crafts or jam. Customers fill out order forms and pay online, and you simply send them what they ordered. Websites let you sell things to people anywhere in the world. They don’t have to go to a store in the neighborhood.

Business Ideas Young people can start up a lot of different businesses. You don’t have time to run a full-time business, so the trick is to choose something you can do when you have time after school, on the weekends, or during school vacations. Here are some ideas: • • • • • • • •

babysitting pet care, including dog walking, pet sitting, and dog grooming. odd jobs (fixing things around the house) lawn care, including mowing lawns, raking leaves, snow shoveling, and gardening tutoring giving music lessons on an instrument or in singing blogging, which can earn money through advertisements selling vegetables, herbs, prepared foods, or crafts at a farmers market or at craft fairs

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A website means you’re serious about your business. Plenty of people could start tutoring other students. But how many of them will have a whole website to back it up? By building a website, you’re saying to customers that you’re responsible and professional. They’ll be more likely to hire you instead of someone else.

Creating a Website First, if you don’t know how to build a website, you’ll need to learn how. Luckily, you don’t have to know a whole lot before you can create your own website. Make a plan. Figure out how many pages you want to have on your website. What will the home page look like? You can draw it out or list the things you want on your home page (like your business name, contact information, links to other pages, and more). Do that for every page you want to make. You have a few choices about how to make your website. You could use another website to make your own website, called a hosting site. Wordpress is a good example of a hosting site that guides you through making your own website. You can choose themes that look professional, and change them a little to fit your own business. Hosting sites let you build websites very quickly and without much learning involved. If you want to get your site running quickly, a hosting site might be the right choice for you. You can also create your own website using a website-building application. These applications let you build your own website by dragging and dropping different items onto a page. You’ll have to learn a little about the application you choose before you get good at using it, but you’ll end up with a great looking website with a little practice. Adobe Dreamweaver is one of the most popular, although it costs a lot of money to buy. Check out your

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school or local library to see if they have a version you can use. You can also use cheaper website-building applications like Aptana Studio, Amaya, or Kompozer. Your last option is to build a website using HTML (hypertext markup language). HTML is basically the language out of which websites are made. If you know HTML, you can create your own website and have control over everything about it, from where the information is placed to the graphics and the font. Learning HTML takes time, so you may want to take a class or have someone teach you. After you get the hang of it, you can create your own website using HTML. Next, you have to register your website’s domain name. The domain name is your web address. Think carefully about what you want your domain name to be. In the best case, your domain name will be the same as your business name. However, a lot of domain names have been taken, because there are so many websites out there! Register.com and Network Solutions are sites that will help you figure out if a domain name is already taken. If you build a website on Wordpress or a similar site, it will also help you out. You will have to pay a little money to buy your domain name. If you’re planning on selling your stuff on your website, you’ll need to make sure your website is set up for it. You can use online purchasing platforms like Shopify. Platforms are basically ways to turn your website into an online store. Then “go live,” as they say. Start running your website after checking it to make sure it looks the way you want it too. Now check it out online. You’ll probably have to make a few changes before you think it’s perfect. Keep track of your website. Keep it up to date. If you’re creating a new product, make sure your website says so. Get rid of out-ofdate information. You want people to keep coming back to find out

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more—and if they find old information, they might think you’ve gone out of business or are too busy to bother talking to them.

More on Choosing a Domain Name

You might have to get creative when you come up with a domain name. You should think of a few key words that go with your business. Some people suggest you stick to .com names, instead of .net or .org. People tend to assume all domain names are .com, so if you use another ending, your customers might get confused. Make your domain name easy to remember and easy to spell, so make it fairly short. Hyphens can make domain names confusing too. You don’t want a name that is fifty letters long, because people won’t remember it. Here’s how this might work. Your imaginary tutoring business is named Smart Tutors. Unfortunately, smarttutors.com is taken already. You don’t want to make it smart-tutors.com or smarttutors.net, because it will be harder for people to find. Instead, you might try inserting the initials of the state you live in. If you live in New York, for example, your domain name would be smarttutorsinny.com. The goal is to keep people from accidentally going to a different website when they really meant to visit yours.

Promoting Your Website Now that you have a website up and running, you need people to visit it! A website without any visitors isn’t very useful.

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One way people will find your website is through search engines like Google and Yahoo. You can make sure people will see your site on search engines in a couple different ways. First, you can do some research about what sorts of key words are popular. Let’s say you’re still working on your tutoring website. What sorts of words are people Googling when they search for tutors? Check out Google Trends to find out. If you type in the word “tutor” on Google Trends, you’ll see how many people have searched for the same thing, and where they live in the world. You’ll see how popular the search was over time. Related terms are also listed. You can see that “tutor” as a key word hasn’t been as popular lately as it used to. But “typing tutor,” “tutor online,” and “math tutor” are more popular. What does that mean for you? You should try to put popular keywords on your website. That way, when people search for “typing tutor,” for example, they might come across your website. You’ll also be able to see what people care about. Maybe you were wondering about what kind of tutoring to focus on. You can see typing and math are more popular than other subjects, so maybe you’ll decide to advertise those skills. You can also list your website with search engines. That way people are more likely to find your website by random searching. For Google, go to google.com/addurl. Simply add your domain name and any comments you want and you’re good to go! For Yahoo, go to bing.com/toolbox/submit-site.url. List your website with as many search engines as you can. Word of mouth is always a good idea too. No matter how much you do online, you still want to tell people about your new business and its website. The more people you tell, the more people will visit your website. Then those people will tell other people—

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Google is used to search the web more than a billion times every day! Knowing how to promote your website through search engines like Google can be one of the best ways to have your website visited by potential new customers. and before you know it, hundreds or even thousands of people will have visited your website!

Adam’s Websites Adam Horwitz has a lot of experience with websites. Websites are how he’s made most of his money, after all!

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Building Websites for Smartphones People do a lot of web surfing and buying online on their smartphones. It’s worth it to create a website specifically for smartphones, so more people will come to your site. Smartphone sites generally have to be simpler, but still informative. Website-building applications often let you create smartphone websites. You can also learn how to code your own.

When Adam was fifteen, someone at his school started a gossip website. The website invaded people’s privacy, so it was taken down, but it was very popular for a few days. Adam was inspired. If a website could be so popular, he could make his own website and get people’s attention too. So Adam started a website that listed parties and other events in Los Angeles, where he lived. His idea was too good, though. Hundreds of people visited the website and went to the parties. Adam had to shut the website down because too many people would show up at an event. Eventually, Adam came up with a successful website selling his courses on how to make money online. He describes his own approach to selling on websites: Well, I think to create a quick product, the best way to do it is through video. You just buy a program that you can record . . . just like you’re talking, and I’m talking into the computer right now. And you just talk and record the

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Blogging A blog is a special kind of website made up of posts. The author of the blog will make posts every so often to update people who follow the blog. Blogs usually have a particular focus. Some blogs are personal and update followers on the author’s vacation or new recipes they’ve tried. Charities or businesses run other blogs, keeping followers updated on what their organizations are doing. You should consider creating a blog to go along with your business website. A blog is a more personal way to connect with your customers, and lets them give you feedback on how your business is doing. For example, you could write a blog post about the importance of learning HTML (which is one thing you tutor). A blog follower sees your post and asks you about your expertise and hourly rates tutoring HTML because she wants her son to learn. You just got another customer! Adam Horwitz also thinks blogs are a great tool. He says:

I really think that a blog is very, very important, especially if you’re trying to build a relationship and you’re trying to brand yourself to your readers or to your customers. . . . On your blog I feel like you can really let loose and be yourself and just share what you really are all about and all of what you do on a daily basis, and I think it’s a good place to just have [it] be like your home where you can really be yourself to everyone and where they can communicate with you and comment.

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screen and show them what you did to be successful, pretty much. That’s all people want to see. They want to see stepby-step how you did it. They don’t want to read a lot, they want to watch you talk about how you did it, and they can pause it and follow your steps and all that. That’s definitely the quickest way, I think, too. Adam offers a free video on his website, to get people interested in his products. Then he sells more videos to customers who are interested. He has set up a payment system through his site, but he doesn’t have to ship anything. The videos are ready for download. His website—and his business—has been a success. If you follow his example, maybe yours will be too!

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Three

Social Media

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ocial media is a big part of a business’s success. If people are talking about you and connecting with your business on social media sites, you’re well on your way to making money and having a successful business!

What Is Social Media? People use the phrase social media a lot, but sometimes it’s confusing what it actually means. Officially, social media is the way people share information in online communities. Facebook and Twitter are the two most famous social media sites, but there are dozens more online.

Facebook offers businesses a free way to keep their customers informed on new-and-improved products and services.

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Social media websites can help you do all sorts of things. They can help you network with other people. Networking is another way of staying connected with people who can influence your business and keep it growing. Social media sites help you work together with other people. You can message with someone you’ve never met, but who has great ideas about your business. Maybe you “meet” someone online who has the exact same business you do in another town. You can trade ideas and make each other’s businesses better. Or maybe one of your customers has a really great idea about how to make your business better, and sends you a message about it. Keep in mind that you’ll have to keep up with your social media sites. You can’t expect a social media site to magically make you money. You have to work hard at it! Staying active on sites will help you network with more people, and communicate more information.

Facebook Lots of businesses have Facebook pages. At the end of 2012, almost 13 million businesses had Facebook pages. As a young person, making a Facebook page for your business is a great idea. You’ll attract new customers and keep old customers up to date on what’s going on. The first step is to set up a page for your business. If you have a logo, use that as your profile picture. If you don’t have a logo, now is the time to make one. Also include information about what your business does, and how to get in touch with you. Post a link to your website too. Then you’ll have to share your page with everyone you know! A Facebook page that no one visits isn’t very useful. You can get

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Every major social media website has a corresponding app for smart phones, like this iPhone. Promoting your business through social media websites gives you a way into your customers’ pockets!

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your friends to “like” your page and share it with other people. The more people who see your page, the more people will know what your business is. And the more customers you’ll have. You have to pay attention to your Facebook page to really make it work. You could just set up a page with a little information about your business and leave it like that. But that wouldn’t encourage people to come visit your page. You need to post pictures and updates, invite new people to like your page, and create events. Check out Facebook’s “Facebook for Business” page, which covers all sorts of tips on how to use the site to grow your business. For your imaginary tutoring business, you could post updates about where you tutor and what subjects you tutor. Invite your friends to join, and tell your teachers about it too. Eventually, lots of people will see your page. Maybe a teacher or administrator at another school district will see your page. Then he gets in touch with you and asks about expanding to his school district. You just doubled the number of potential customers you have, all with Facebook.

Twitter Twitter is a social media site that lets you send short messages to people who follow you. You can follow individual people, businesses, and other organizations. More and more businesses have Twitter sites that keep followers updated on what’s going on with them. Make your Twitter picture your logo, just like on Facebook and on your website. Twitter pictures are tiny, though. If your logo

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doesn’t fit well in such a tiny space, make your picture an image that people will associate with your business. For your tutoring business, you could make it a brain or even your own face, so people can see who runs the company. You can tweet events, ask customers how they like your products, and tell people about new business projects you are working on. Keep tweeting often, so your followers will keep visiting your page again and again. You can also use Twitter to point people to your website, Facebook page, or blog. You could even offer a special discount for people who follow your tweets. Only people on Twitter will know about it, but once other people find out, they’ll want to follow you on Twitter too. Be sure to follow other Twitter feeds with your business Twitter account. You can connect with customers and other businesses like yours. You’re wasting an opportunity if you don’t follow other people’s Twitter accounts.

YouTube YouTube is the video site where you can watch anything from a classical concert to cute cats. People can post just about anything on YouTube, and so can you. Videos can explain just what your business does. They can show your business in action. For your tutoring business, for example, you could post several different videos on YouTube. One could be short interviews with customers you’ve worked with before, and who have learned a lot from you and gotten good grades. Another video could be an advertisement showing who you are, where you work, and how to get in touch with you. If people like your video, it could get hundreds or even thousands of views!

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Lots of people like to watch videos rather than read text, as Adam found. Watching a video about your business is a lot more fun for some people than reading a big paragraph. But don’t just post videos on YouTube. You’ll want to post them on your website too. People might find your videos on YouTube when they’re searching the Internet, but they’ll also find them when they visit your webpage.

LinkedIn Another social media site is LinkedIn. LinkedIn is for professional businesspeople who are looking to make contacts. As of 2013, 200 million people used LinkedIn all around the world. As a businessperson, you create a LinkedIn profile that describes who you are and what you do. You can connect with other businesspeople you know, and even some you don’t, but who are people with whom you think you have a lot in common. LinkedIn profiles let you connect with people who might help you start or grow your business. Do you need some help creating a business plan or finding money? You can ask around on LinkedIn. Do you want to expand your business to another part of town? Someone on LinkedIn could help. Basically, LinkedIn is another way to get your business’s name out there, and to connect with professionals who really matter. LinkedIn Groups is a one feature of the website you should take a look at. It lets you have discussions with other professionals on the site. You can talk about how to make your businesses better, and what has worked for people and what has not.

Social Media

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Some Other Social Media Sites

Only a few social media sites are really popular, but there are many more out there. Any one of them could become the next big thing, so start exploring them now. • Pinterest: Pinterest is a site that lets you collect interesting things on the Internet and puts them all in one place so you can share them with other people. • Google Plus: Google created a social media site to bring together many of the things people like to do online. You can text or video chat with friends, share images and websites, and follow other people’s interests. • MySpace: One of the first popular social media sites, MySpace has been around for a few years. Today, you can use MySpace to blog, post pictures, send messages, and share music. A lot of bands use MySpace as their website.

Endless Opportunities and a Little Danger Adam understands the value of social media. Part of why he has been so successful is because he has used social media really

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well. He has also been a good businessman because he does what he loves. He explains: With the opportunities out there now, there’s no reason that with the Internet the way it is and with social media and with YouTube and Twitter and ways to create websites for free and blogging, there’s no way that anyone should do something that they don’t enjoy. The opportunity is out there, you just have to go for it. It’s also so easy to get your opinion and to get your ideas out to the world, unlike having to hand out business cards and having to go talk to people personally. With the Internet, you can put up a video on YouTube and potentially everyone in the world can watch that video if they decided to watch it and if they had Internet access. So I mean the opportunity is just insane. Ten years ago that wouldn’t have been possible. . . . No matter what age you are, no matter how old you are, or if you’re older, if you’re younger, if you’re ten. However, Adam also understands the dangers of social media. “Well, once you get out there, you’re out there,” he says. You can’t really hide with the Internet. . . . Once you put something out, once you put a Facebook picture up, once you put your own Twitter up, it’s kind of all adding to a documentary of your life, and that’s going to pretty much be there forever. Even if you delete it, it will still somehow be out there. So just thinking about that, it’s kind of—it’s not scary, but it’s kind of just something that you need to just keep in mind.

Social Media

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Social media is a great way to make your business more personal. Adding a personal but appropriate touch to your business can be great for your building your business relationships. Adam Horwitz shares pictures and information about himself online (including this picture from a Halloween party) in order to connect with potential customers.

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Building a Business in the Virtual World

Social media sites make your life and your business a lot more public. On the one hand, people will feel really connected to your business if they know you and they know what you’re doing. When they can comment on things, or watch a video about how you run your business, they’ll want to buy stuff from you. On the other hand, you could post something on a social media site that could get you in trouble. You could offend someone, or accidentally post a picture of yourself you didn’t want people to see. Be sure you use social media carefully, and don’t mix your business social media accounts with your personal ones.

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Four

The Power of E-mail

A

website and social media are two ways to interact with customers. E-mail is another great tool for connecting with people who may want to buy what you’re selling, or who can help your business grow. All young businesspeople should have and use e-mail addresses for their business.

Business vs. Private E-mails Most people have a personal e-mail address. You might get emails from your family and friends. Maybe you follow some blogs that get e-mailed to you when there are new posts. Or your school sends you things via e-mail. You can also use your personal email to buy things online.

Gmail, an e-mail provider developed by Google, is a free way to start an e-mail for your business. It can be integrated with your domain name, if you decide to buy one.

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Building a Business in the Virtual World

Once you set up a business, you want an e-mail that belongs to that business. Otherwise, you’ll be getting e-mails to your personal account about all sorts of business-related things. New customers will be e-mailing you about buying your product. People who want to work with you to make your product better might also send you e-mails. To keep things organized, set up a business e-mail. Your business also looks a lot more professional when you use a business e-mail. You won’t be taken seriously if people with questions about your business have to e-mail [email protected]. Take some time to think about what your business e-mail address will be. You have two choices about how to set up your e-mail. One choice is to use Gmail, AOL, Yahoo, or another wellknown e-mail provider. Then your e-mail address would look something like [email protected] or [email protected]. Your other choice is to use your own domain to set up your email. If you’ve already bought a domain for your website, it probably came with the chance to set up an e-mail address using that domain. So, instead of [email protected], your address would be [email protected]. Let’s take a look at what that means, sticking with the tutoring business example. If your business is named Smart Tutors, and your domain is smartnytutors.com, you can have an e-mail address that ends in @smartnytutors.com. The whole address could be [email protected] or [email protected]. On the other hand, if you use a regular e-mail account, your address could be [email protected].

Making E-mail Work for You E-mail isn’t just something you check every day to see if anyone sent you anything. E-mail is also a tool for growing your business!

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E-mail is how businesspeople keep in touch most of the time. You may also need to talk to people on the phone from time to time, but most of your communication will happen over e-mail. Be prepared to spend a few hours every week sending and answering e-mails. E-mail updates are one way to reach lots of people fast. Maybe you have a big announcement—you’re ready to expand your business to another town, or you’re looking for an employee. An email contact list is a great place to start. You can send out your announcement to everyone on the list. Your contact list can include all sorts of people. Anyone who has ever hired you or bought something from you should be on that list. So should people who have given you business advice, worked with you to collaborate on a project, or given you funding to start your business. Basically, you should have the e-mail addresses of everyone who has ever come in contact with your business! You can also divide up your contact list using your e-mail account. Maybe you only want to e-mail customers who have bought something from you before. Or you want to send out an e-mail to people who have donated money to you to help set up your business. Instead of memorizing who’s who, most e-mail accounts let you divide up your contacts into lists. You can have a “current customer” list, a “potential customer” list, a “funder” list, and more. Use a signature at the bottom of your e-mails. A signature is your name and a few lines of text that are sent out at the end of every e-mail. Your business signature should include your name, the name of your company, and contact information, like your phone number, website, and blog. Signatures let the people reading your e-mail know you’re serious about your business. They also tell people where to find more information about your business.

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Building a Business in the Virtual World

A Business Phone As your business takes off, you’ll need to talk to people on the phone sometimes. Some customers will prefer to call you rather than e-mail you. And if you have something you have to tell someone right away, calling is better. If you already have a cell phone, great! Are you willing to use it for your business, and to give out your number to lots of people? If not, think about getting another cell phone, or even your own phone line. Your family won’t be very happy if you’re using their phones all the time. Paying for a phone is another business cost, but one that’s worth it to grow your business.

Adam’s E-mail Success Adam Horwitz knows how to use e-mail to grow a business. His first time creating a business was hard, especially because he didn’t have a lot of e-mail contacts. The second time around was a lot easier for him. He explains: It was twenty times easier, because first of all you’ve done it before, so you kind of can look back at what you did on the first one . . . you have more insight and you have a better understanding of what to do next. And then on top of that you have a huge e-mail list—or a pretty big e-mail list, at least—and then you have all your affiliates that have all opted in. So then you just say, “I’m sending this product out on this day. This is what it is. Go check it out, and if you mind, blasting it to your list as well.” It’s all about, really,

The Power of E-mail

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Adam’s first venture wasn’t a success, but it provided him with contacts. Most e-mail providers organize contacts for you—and by keeping in touch with his contacts, Adam was able to make his next product a success.

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networking. If you can get a good list of affiliates, you’re pretty much set for the next product you do, because they do the work for you. Adam discovered that creating a big list of e-mail contacts helped him sell his second product. He had to go through all the work of making an e-mail list in the first place. Then, when that was made, he could keep in touch with lots and lots of people. And all of those people could forward Adam’s e-mails about his businesses to even more people. E-mail could you lead you to new opportunities too!

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Five

Be Open to New Opportunities

T

he Internet opens up a lot of possibilities. You can find new customers in another state. You can sell your product to someone on the other side of the world. You can get advice from people about how to grow your business. You have to make the decision to take advantage of those possibilities. If you don’t take action, you won’t grow your business! Be as open as you can be, and try new things whenever you can. Opening a Twitter account or starting a blog is just the first step. The next step is posting to that Twitter account and writing new blog entries. If you don’t add new content, there isn’t any reason for people to come to your sites. The next step after that is getting people to follow your Twitter account and read your blog. Lots of businesses end up with sites full of content, but no one is reading them.

Succeeding in business as a young person takes determination and hard work, but you can reach your dreams regardless of your age.

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Tell people about all of your sites online. Once you get a few people to go to them, they’ll tell other people, who will tell other people, who will tell others. Follow as many people as you can on social media sites, talk about your website whenever you can, and add to your e-mail contact list all the time. If you work hard, you’ll have people excited about your business, all because of what they’ve seen online.

Taking Chances Adam Horwitz has been successful partly because he hasn’t been afraid of tackling new opportunities. He has a lot to say about taking chances and never giving up. In one interview, he says: If everything completely fails, you’re still at school. You’re still going to get your degree. So, it doesn’t matter as long as you have fun doing it, work your way up, and stay dedicated. There’s no real loss. Enjoy the way up. He has a good attitude about taking chances. In fact, he tried to make money in a lot of ways—remember the failed event website? He never let that get him down. He kept on going to school, and he also tried out new business ideas. Eventually, one of them was very successful, and he ended up making a lot of money. Adam encourages other young businesspeople to never give up. His advice is: Don’t listen to what other people say. If you’re a young entrepreneur and you’re trying to make it big online, don’t think that you can’t do it. With the internet the way it is

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now, you can do anything. Even if everyone is saying, “No— it will never happen. Everything online is a scam!” . . . Check them out of your mind and go for it. That’s what I did and I’m doing well, I think. Adam followed his passion and ended up with a successful business. As you start and grow your business, don’t be afraid to take chances. Just don’t take chances that could have really bad consequences. For example, don’t take chances that are illegal. Don’t choose not to pay taxes because you want to keep all your money! When the government finds out, you’ll be in trouble. The chances you should take include talking to new people about your business, trying out several business ideas even if some fail, and investing a little of your own money (but not more than you can afford) into a good business idea.

Success as a Young Person Young people who want to start businesses deal with some extra challenges that adults don’t have to face. Being a young person starting a business was extra hard for Adam. He says: Even my friends were so stereotyped into thinking that you can’t do anything when you’re young—that you have to wait until you’re older and have a degree to actually become successful. So, whenever I would tell people, “I’m doing this,” they wouldn’t take it seriously. Adam didn’t listen to his friends or other people who discouraged him, though. He did what he wanted.

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He also looked on the bright side of things. Instead of getting frustrated about his age, he used it to find new opportunities and made other young people into customers. “Age also has its benefits,” he says. “For instance, I use my age as a marketing advantage. I can target younger people. I’m eighteen years old. I say, ‘If I’m eighteen years old, you could be doing the same thing no matter how old you are.’” As a young person, you also know a lot about what’s going on online. That gives you an advantage over some of the older businesspeople out there. You’re used to social media sites, e-mailing, and online searches. Chances are, you’ve already been doing all those things for a long time. You can use your knowledge and skills to keep your business going strong online. These days, if you want to start a business, you have to do a lot of work online. You’ll need to set up a website, create a Facebook account, and e-mail people all the time. You may think that sounds like a lot of work, but it’s also a lot of fun. And using the Internet will make starting—and growing—your business so much easier! You’ll be making money and building a better business before you know it.

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Find Out More Bizinate www.bizinate.com

Online

Online Businesses for Kids kidmoney.about.com/od/jobsforkids/tp/ Online-Business-For-Kids.htm PBS Kids: Be Your Own Boss pbskids.org/itsmylife/games/boss Young Entrepreneurs www.babble.com/kid/young-entrepreneurs-successful-childrenbusiness-ideas-kid-franchises/jason-oneill

In Books

Bernstein, Daryl. Better Than a Lemonade Stand!: Small Business Ideas for Kids. New York: Aladdin, 2012. Craig, Randall. The Everything Guide to Starting an Online Business. Avon, Mass.: F+W Media, 2013. Linecker, Adelia Cellini. What Color Is Your Piggy Bank? Entrepreneurial Ideas for Self-Starting Kids. Montreal, Quebec: Lobster Press, 2004.

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Vocabulary Affiliates: people or organization who are associated or connected with another person or oganization. Application: a piece of software designed for a particular purpose. Collaborate: to work together on. Content: the information available on a website or on a social media site, as opposed to the appearance of that site. Documentary: a movie or show about real events, including real facts and interviews with real people. Expenses: the money spent on something. Feeds: information from websites that is collected in one place. Finances: the money going into and out of a business. Font: a set of letters, numbers, punctuation marks, and symbols with the same design, size, and style. Funding: money provided for a particular purpose. Passion: intense love for something. Professional: to act in a serious and mature way appropriate for the business world. Resources: a collection of things that help a business grow, such as money, time, employees, and materials. Responsible: able to be trusted or relied upon to carry out a specific task or duty. Revolutionized: changed in a dramatic way. Search engines: websites that retrieve information from the Internet.

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Stereotyped: to be assumed to be a certain way because one belongs to a specific group (based on ethnicity, age, religion, or other identity). Telegraph: a device used to transmit a short message through a wire over many miles. Vendor: seller.

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Index age 7, 19, 41, 54, 57 blogs 30, 45 business plan 7, 16, 39 communication 12–14, 48 computers 15, 21 customers 7–9, 16–18, 22–24, 26, 28, 30–31, 34–35, 37– 38, 42, 45, 47–49, 53, 57

Internet 14–19, 21, 39–41, 53, 55, 57 keywords 27 librarians 17 LinkedIn 39 logo 35, 37 money 11, 15–19, 23–25, 28– 29, 33, 35, 39, 48, 55–57

domain name 25–27, 46 name 7, 16, 24–27, 39, 46, 48 e-mail 17–18, 45–51, 55, 57 opportunities 5, 41, 51, 55, 57 Facebook 7, 33–35, 37–38, 41, 57 goods 6, 13, 19, 23 Google 27–28, 40, 46 Horwitz, Adam 19, 28, 30, 49, 55 HTML 25, 30

phone 48–49 research 15–17, 27 services 6, 19, 34 signature 48 smartphones 29 social media 5, 17, 33, 35–37, 39–43, 45, 55, 57

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transportation 13 Twitter 33, 37–38, 41, 53

websites 17, 21, 23–25, 28–29, 35–36, 40–41

videos 31, 38–39

YouTube 38–39, 41

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About the Author and Consultant C.F. Earl is a writer living and working in Binghamton, New York. Earl writes mostly on social and historical topics, including health, the military, and finances. Brigitte Madrian is the Aetna Professor of Public Policy and Corporate Management at the Harvard Kennedy School. Before coming to Harvard in 2006, she was on the faculty at the University of Pennsylvania Wharton School (2003–2006), the University of Chicago Graduate School of Business (1995–2003) and the Harvard University Economics Department (1993–1995). She is also a research associate and co-director of the Household Finance working group at the National Bureau of Economic Research. Dr. Madrian received her PhD in economics from the Massachusetts Institute of Technology and studied economics as an undergraduate at Brigham Young University. She is the recipient of the National Academy of Social Insurance Dissertation Prize (first place, 1994) and a two-time recipient of the TIAA-CREF Paul A. Samuelson Award for Scholarly Research on Lifelong Financial Security (2002 and 2011).

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Picture Credits Dreamstime.com: Ajv123ajv: p. 36 Bizoon: p. 46 Elena Elisseeva: p. 10 Ginasanders: p. 50 Helder Almeida: p. 20 Jakub Jirsák: p. 28 Lucian Milasan: p. 34 Mariaam: p. 22 Npage: p. 12 Oleksiy Mark: p. 14 Paul Hakimata: p. 54 Peshkova: p. 44 Pressureua: p. 32 Skypixel: p. 52 Dude, I Hate My Job: p. 42 Millionaire at Twenty-Four: p. 18

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